BP Says Staff Bonuses Now to be Based on Safety Performance

BP is rearranging its bonus structure so that 4th quarter payments are given out in accordance to "excellent safety and compliance standards" and to those who reduce "operational risks". It's a PR stunt designed to publicly bolster its tattered safety reputation if there ever was one. Here's how it will work: The BBC reports:

BP's new boss Bob Dudley has told the company's 80,000 employees that safety will be the sole measure for bonus payments in the fourth quarter ... Existing bonus arrangements would be honoured for the first nine months of the year, he added. BP is struggling to repair its image following the Gulf oil spill disaster.

"We are taking this step in order to be absolutely clear that safety, compliance and operational risk management is BP's number one priority, well ahead of all other priorities," the email said.

Yes, the number one priority for 25% of the year. Whether or not it's an effective publicity move is up for debate -- but in terms of actually making BP a safer company, it's pretty weak. Considering that disasters only occur rarely, the incentives for maintaining high safety standards will likely be largely be arbitrary when awarding bonuses. No Deepwater horizon this quarter? Here's your bonus.

Obviously, it won't be that simple -- we'll have to wait and see if violating safety regulations (which I'm assuming are self-imposed by BP anyways) actually ends up with anyone's bonuses docked. But for now, it seems like a cheap way to get the media to talk about how focused BP is on safety after its big spill. It gives its BP execs an opportunity to say things like this:

"In particular, we are committed to ensure that a low-probability, high-impact incident such as the Deepwater Horizon tragedy never happens again."